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MGL’s monopoly on Mumbai’s city gas network has ended: PNGRB


The downstream regulator has said that Mahanagar Gas Ltd (MGL) no longer has a monopoly over city gas networks in Mumbai. This can set off intense competition among gas marketers for customers in the lucrative metropolitan region and compress profit margins for MGL.

“As on the date, the infrastructure exclusivity period for the laying, building or expansion of the city gas distribution network has expired for” Mumbai & Greater Mumbai, which is operated by MGL, the Petroleum and Natural Gas Regulatory Board (PNGRB) has said on its website. The exclusivity period granted to MGL ended on April 11, 2021, it said. MGL was awarded the distribution license in January 2009.

The regulator also announced that the exclusivity period for Vadodara Gas Ltd (VGL) in Vadodara ended in March 2023. VGL had received the license in October 2016.

PNGRB also made it clear that no infrastructure exclusivity period was granted to Assam Gas Company for Upper Assam and Tripura Natural Gas Company for Agartala when they were awarded city gas distribution licenses in February 2015.

Previous regulatory attempts at ending distributors’ exclusivity have met with stiff resistance from companies, with several cases pending in the court today.

If MGL or VGL don’t legally challenge the PNGRB’s move on ending exclusivity, it could spur market competition and increase affordability for natural gas customers.On Monday, oil minister Hardeep Singh Puri said the full benefits of gas sector reforms haven’t reached the end user. He also pointed towards the strong profits reported by city gas companies.City gas companies get cheaper domestic gas and softer tax treatment for supply to households and vehicles. They, however, take advantage of their monopoly status and end up making big profit margins on CNG.

The government also wants them to take piped natural gas to more and more households, where progress has been much slower than the more profitable segment of CNG.

Ending exclusivity would allow competitors to set up marketing and distribution infrastructure in Mumbai and Vadodara, raising the quality of services and lowering the cost of supply for customers.


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